What is a Hard Money Broker?
Hard money brokers assist borrowers in making informed decisions and guarantee that the hard money lender they choose is reliable and well-respected. Become a hard money broker and have a better chance of finding regional lenders and beneficial arrangements.
KEY POINTS FOR BECOMING A SUCCESSFUL HARD BROKER:
In contrast to conventional banks, hard-money lenders are privately backed and unregulated. The issue of how to successfully close a hard money loan with a respectable lender is brought up by this. When securing hard-money loans for your clients, take into account the following five suggestions:
- When it comes to irrational up-front costs, use caution. Mortgage brokers and originators should be aware that many private lenders who want a borrower to submit substantial quantities of money for “due diligence” are often not actual lenders. A lender may request a third-party evaluation. These transactions frequently never conclude, leaving your borrower hundreds of dollars short. In this regard, be alert if a lender requests more than 0.5 percent of the overall loan amount.
- Beware of brokers that pose as lenders. Some people who represent themselves as direct hard-money lenders may actually be brokering the transaction to a different party without telling you, of course. In light of this, it’s crucial to understand who makes decisions on lending, and it’s just as crucial to get confirmation that your “lender” genuinely funds its own loans.
- Full disclosure of all relevant information is required. Simply put, brokers must disclose any information that might have a meaningful influence on a transaction. Tax liens, title problems, and certain time-sensitive concerns might be included in this data. It’s almost a given for mortgage experts that a lender will ultimately learn about problematic information, so it’s always a good idea to reveal this information straight away and assist all parties in taking the appropriate actions to remedy the current concerns.
- Watch out for potential bait-and-switch transactions. Certain components of the loan procedure, such as documentation requirements, site inspections, title concerns, environmental considerations, etc., are avoided by some hard-money lenders. In light of this, you must comprehend the procedures and length of time necessary for each phase of the loan’s overall process and keep an eye out for any warning signs.
- Keep an eye out for phrases that are inconsistent with market conditions. Last but not least, brokers need to be aware that some hard money lenders prey on people with bad credit by stating they can close deals no other lender can. The truth is that a deal may not actually be true if it seems too good to be true. Trust your gut in these situations, and don’t complete the deal.
About Hard Money University
Rod Stanback is the founder, CEO and sole owner of Hard Money University and Flip Funding, a direct hard money lender formed in 2013. Flip Funding provides capital to real estate investors for fix and flip, rental and new construction projects.
Flip Funding is one of the top hard money lenders in the United States, with over half a billion dollars in loans closed.
Location: Experience: Hobby:
Philadelphia, PA 14 years Boxing
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